We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Choppy Euro price action building a triangle

The bad news is that price action of late has been choppy and uninspiring, unless of course you favor mean reversion or range trading, in which case this has been your market. The good news for those looking for some follow through, is that price action is contracting and building a triangle which should give EUR/USD a shove.

The push looks likely to be lower, if trend and tone are dictating. Since early this year the trend has been down and only a couple of times the past few months has the Euro looked like it might threaten to trade materially higher. With a symmetrical wedge forming a breakdown is the likely scenario given it is developing along the path of least resistance and in the absence of oversold conditions.

It may very well take the better part or all of next week before we get a resolution, so hanging tight may be the name of the game next week. Should we see a breakdown it won’t be long before the November low and 1-year underside trend-line are met, which could be enough to stop momentum before another bounce develops. It’s been that kind of market. However, if momentum builds and we see a daily close below the underside trend-line then it looks reasonable to continue riding a bearish bias.

If, however, a top-side breakout develops, failure risk looks high as it not only will a breakout be against the trend but with resistance of various forms standing in the way from the mid-11400s up to the mid-11500s. Standing aside and seeing how things play out at those levels looks like a prudent approach until the Euro can prove it can sustain a move higher. On a deep enough push into resistance around the low-15000s, shorts may become attractive.

About your FOREX.com Demo Account

A demo account is intended to familiarize you with the tools and features of our trading platforms and to facilitate the testing of trading strategies in a risk-free environment. Results achieved on the demo account are hypothetical and no representation is made that any account will or is likely to achieve actual profits or losses similar to those achieved in the demo account. Conditions in the demo account cannot always reasonably reflect all of the market conditions that may affect pricing and execution in a live trading environment.